“We see a good chance that the index will continue to rise since the market psychology is strong now, but it’s likely to face strong resistance at the 62 percent Fibonacci retracement level of 1,230,” Stockholm-based Robert Oldstrand said in a phone interview today. “It’s going to be very tough to get past this level without taking a big breather.”

The S&P 500 has advanced for four consecutive days, closing at 1,197.3 yesterday, the highest level since September 2008. The benchmark measure for U.S. equities has surged 77 percent from a 12-year low on March 9 last year amid signs the economy is recovering from the worst recession in seven decades. Oldstrand said investors are still largely optimistic and many consider market dips to be buying opportunities.

“As we approach this level people will start to unload some of their profit to see how the market reacts,” Oldstrand said. “I expect major resistance, but if earnings reports are positive, as many expect, we could trade sideways rather than see a serious correction.”>>>MORE